Income Beginner: Introduction to Deposit Accounts

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1.
Asset management accounts make tax preparation easy.
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True. Combined statements listing all your financial transactions make it easy to find the information you need to prepare your return.
2.
High-balance deposit accounts typically charge penalties for early withdrawal.
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False. Your money is always available.
3.
How much of your deposit account is insured by the FDIC or NCUA?
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$250,000 ($250,000 for retirement plan accounts). The FDIC or NCUA insures each depositor up to these limits.
4.
Deposit accounts can be appropriate for investors with low risk tolerance.
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True. The high degree of security they provide make deposit accounts an effective alternative for those who can't afford to lose their capital.
5.
The simplest kind of deposit account to set up and maintain is a _______.
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Passbook account. A passbook account is easy to start, offers immediate access to funds, and requires low minimum balances.